BOT keeps close eye on Greece, warns of global money-market volatility

The yield on the benchmark 10-year US Treasury note to 2.32 per cent yesterday was down from 2.48 per cent last Friday, which was the highest closing level since the end of September last year.

The euro depreciated from 1.1167 to the US dollar on Friday to 1.1190 as of 1pm yesterday, while the baht remained unchanged from Friday, at 33.78.

In the same period, the yen appreciated from 123.85 per dollar to 122.33, while the South Korean won depreciated from 1,116.44 on Friday to 1,118.84. The Malaysian ringgit also depreciated, from 3.768 to 3.785.

"The global money markets will continue to fluctuate in different periods this week because of the uncertainty over Greece’s debt problem, which has affected the euro. The [BOT] will closely monitor the situation, and we are ready to maintain the stability of Thailand’s financial system," said Chantavarn Sucharitakul, the Thai central bank’s assistant governor for the Financial Markets Operations Group.

Nopporn Thepsithar, chairman of the Thai National Shippers’ Council, said that if Greece defaulted and this affected the euro-zone economy, then and only then would the Greek situation affect Thai exports. "If the European Union is unable to take care of Greece’s debt situation, then it could affect the [EU] economy, and if that happens then it will affect Thai exports. But I do not see this happening, as I believe that the EU should be able to handle it," he said.

Nopporn said other factors were affecting Thailand’s exports to the EU more than the Greek situation. These included the cancellation of Thailand’s tariff privileges under the Generalised System of Preferences, the 20-per-cent drop in the euro’s value since the beginning of the year, and the sluggish recovery of the euro-zone economy.